ЁЯз╡: The 10 Metrics for SaaS Startups (an Operator's Guide)

Focusing on the wrong things can kill your startup.

Based on founding and scaling @edenworkplace, here are the metrics that matter most:

Metric 1: ARR (Annualized Recurring Revenue)

You will need to know this number each day, so you'll focus on Contracted ARR in your CRM tool (as opposed to accounting ARR).

Big ARR milestones are $100K (Signal), $1 million (PMF), $10 million (Growth), $100 million (IPO Scale)
Metric 2: ARR Growth

Once you get past the Signal stage, your ARR growth is the primary determinant of future success (and valuation).

Strong annual growth rate from Signal to PMF is 4x+ and from PMF to Growth is 2.5x+.

@edenofficemagic grew 11x between Signal and PMF stages.
Metric 3: ACV (Average Customer Value)

ACV often starts low for a SaaS company (as your product is not featureful enough for large enterprises) and grows as the company moves upmarket.

ACV is calculated by taking total revenue and dividing it by your number of customer logos.
Metric 4: ACV Growth

Most SaaS companies will make ACV growth a focus.

It is fair to increase revenue per customer as you add more value to users in new features, integrations, and products.

@edenofficemagic grew ACV 2.3x last year, mostly through cross-selling new products.
Metric 5: NDR (Net Dollar Retention)

NDR tracks what happens to $1.00 of avg customer revenue 12 months after acquiring the customer.

You want positive NDR, as that means customer expansion more than offsets reduction and churn.

Below are @edenworkplace's cohorts (132% NDR).
Metric 6: Gross Revenue Churn Rate

A high churn rate always catches up to you, typically in the Growth stage.

"Good" depends on ACV here. Very SMB can be > 30% annual gross churn. Enterprise is typically < 10%.
Metric 7: Gross Margin

Generally, a good SaaS company is well north of 60%, and ideally closer to 80%.

Be conservative: include CSM and support costs in COGS, not just product costs such as AWS. Your VCs will be conservative, so you are better off not deluding yourselves.
Metric 8: CAC Payback Months (on Gross Profit)

CAC is calculated by taking sales and marketing cost and dividing it by the number of new logos acquired.

Then divide CAC by avg gross profit contribution of new logos to determine payback.

6-18 months payback is often the goal.
Metric 9: Months Cash Runway

Cash is like oxygen. When you have it, you don't think about it. When you don't, it is all you think about.

You calculate runway by taking cash balance and dividing it by monthly burn.

Typically, startups aim for 24+ months at raise and 6+ always.
Metric 10: Pipeline

Pipeline is calculated as the sum of outstanding sales contracts (not closed won or lost).

To some extent, your pipeline is your destiny.

If you have enough, you will hit your goals. If you don't, you'll miss them.

Watch it closely.
These are the 10 metrics that matter most for running a SaaS company.

If you keep an eye on them, you'll at least know when you need to course correct.

Follow me @joedubeytldr for more concise lessons on startup building, investing, and decision making.

Onwards + upwards!

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And here they are...

THE WINNERS OF THE 24 HOUR STARTUP CHALLENGE

Remember, this money is just fun. If you launched a product (or even attempted a launch) - you did something worth MUCH more than $1,000.

#24hrstartup

The winners ЁЯСЗ

#10

Lattes For Change - Skip a latte and save a life.

https://t.co/M75RAirZzs

@frantzfries built a platform where you can see how skipping your morning latte could do for the world.

A great product for a great cause.

Congrats Chris on winning $250!


#9

Instaland - Create amazing landing pages for your followers.

https://t.co/5KkveJTAsy

A team project! @bpmct and @BaileyPumfleet built a tool for social media influencers to create simple "swipe up" landing pages for followers.

Really impressive for 24 hours. Congrats!


#8

SayHenlo - Chat without distractions

https://t.co/og0B7gmkW6

Built by @DaltonEdwards, it's a platform for combatting conversation overload. This product was also coded exclusively from an iPad ЁЯШ▓

Dalton is a beast. I'm so excited he placed in the top 10.


#7

CoderStory - Learn to code from developers across the globe!

https://t.co/86Ay6nF4AY

Built by @jesswallaceuk, the project is focused on highlighting the experience of developers and people learning to code.

I wish this existed when I learned to code! Congrats on $250!!
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рдХрджреНрд░реВ рдмреЛрд▓реА,"рд╕реНрд╡рд╛рдореА! рдореЗрд░реА рдЗрдЪреНрдЫрд╛ рд╣реИ рдХрд┐ рдореИрдВ рд╣рдЬрд╝рд╛рд░ рдкреБрддреНрд░реЛрдВ рдХреА рдорд╛рдВ рдмрдиреВрдВрдЧреАред"
рд╡рд┐рдирддрд╛ рдмреЛрд▓реА,"рд╕реНрд╡рд╛рдореА! рдореБрдЭреЗ рдХреЗрд╡рд▓ рдПрдХ рдкреБрддреНрд░ рдХреА рдорд╛рдВ рдмрдирдирд╛ рд╣реИ рдЬреЛ рдЗрддрдирд╛ рдмрд▓рд╡рд╛рди рд╣реЛ рдХреА рдХрджреНрд░реВ рдХреЗ рд╣рдЬрд╝рд╛рд░ рдкреБрддреНрд░реЛрдВ рдкрд░ рднрд╛рд░реА рдкрдбрд╝реЗред"
рдорд╣рд░реНрд╖рд┐ рдмреЛрд▓реЗ,"рд╢реАрдШреНрд░ рд╣реА рдореИрдВ рдпрдЬреНрдЮ рдХрд░реВрдВрдЧрд╛ рдФрд░ рдпрдЬреНрдЮ рдХреЗ рдЙрдкрд░рд╛рдВрдд рддреБрдо рджреЛрдиреЛ рдХреА рдЗрдЪреНрдЫрд╛рдПрдВ рдЕрд╡рд╢реНрдп рдкреВрд░реНрдг рд╣реЛрдВрдЧреА"ред


рдорд╣рд░реНрд╖рд┐ рдиреЗ рдпрдЬреНрдЮ рдХрд┐рдпрд╛,рд╡рд┐рдирддрд╛ рд╡ рдХрджреНрд░реВ рдХреЛ рдЖрд╢реАрд░реНрд╡рд╛рдж рджреЗрдХрд░ рддрдкрд╕реНрдпрд╛ рдХрд░рдиреЗ рдЪрд▓реЗ рдЧрдПред рдХреБрдЫ рдХрд╛рд▓ рдкрд╢реНрдЪрд╛рдд рдХрджреНрд░реВ рдиреЗ рд╣рдЬрд╝рд╛рд░ рдЕрдВрдбреЛрдВ рд╕реЗ рдХрд╛рд▓реЗ рд╕рд░реНрдкреЛрдВ рдХреЛ рдЬрдиреНрдо рджрд┐рдпрд╛ рд╡ рд╡рд┐рдирддрд╛ рдиреЗ рдПрдХ рдЕрдВрдбреЗ рд╕реЗ рддреЗрдЬрд╕реНрд╡реА рдмрд╛рд▓рдХ рдХреЛ рдЬрдиреНрдо рджрд┐рдпрд╛ рдЬрд┐рд╕рдХрд╛ рдирд╛рдо рдЧрд░реВрдбрд╝ рд░рдЦрд╛редрдЬреИрд╕реЗ рдЬреИрд╕реЗ рд╕рдордп рдмреАрддрд╛ рдЧрд░реБрдбрд╝ рдмрд▓рд╡рд╛рди рд╣реЛрддрд╛ рдЧрдпрд╛ рдФрд░ рдХрджреНрд░реВ рдХреЗ рдкреБрддреНрд░реЛрдВ рдкрд░ рднрд╛рд░реА рдкрдбрд╝рдиреЗ рд▓рдЧрд╛


рдкрд░рд┐рдгрд╛рдорд╕реНрд╡рд░реВрдк рджрд┐рди рдкреНрд░рддрд┐рджрд┐рди рдХрджреНрд░реВ рд╡ рд╡рд┐рдирддрд╛ рдХреЗ рд╕рдореНрдмрдВрдзреЛрдВ рдореЗрдВ рдХрдЯреБрддрд╛ рдмрдврд╝рддреА рдЧрдпреАредрдПрдХрджрд┐рди рдЬрдм рджреЛрдиреЛ рднреНрд░рдордг рдХрд░ рд░рд╣реАрдВ рдереА рддрдм рдХрджреНрд░реВ рдиреЗ рджреВрд░ рдЦрдбрд╝реЗ рд╕рдлреЗрдж рдШреЛрдбрд╝реЗ рдХреЛ рджреЗрдЦ рдХрд░ рдХрд╣рд╛,"рдмрддрд╛ рд╕рдХрддреА рд╣реЛ рд╡рд┐рдирддрд╛!рджреВрд░ рдЦрдбрд╝рд╛ рд╡реЛ рдШреЛрдбрд╝рд╛ рдХрд┐рд╕ рд░рдВрдЧ рдХрд╛ рд╣реИ?"
рд╡рд┐рдирддрд╛ рдмреЛрд▓реА,"рд╕рдлреЗрдж рд░рдВрдЧ рдХрд╛"ред
рддреЛ рдХрджреНрд░реВ рдмреЛрд▓реА,"рд╢рд░реНрдд рд▓рдЧрд╛рддреА рд╣реЛ? рдЗрд╕рдХреА рдкреВрдБрдЫ рддреЛ рдХрд╛рд▓реА рд╣реИ"ред
1/12

RT-PCR corona (test) scam

Symptomatic people are tested for one and only one respiratory virus. This means that other acute respiratory infections are reclassified as


2/12

It is tested exquisitely with a hypersensitive non-specific RT-PCR test / Ct >35 (>30 is nonsense, >35 is madness), without considering Ct and clinical context. This means that more acute respiratory infections are reclassified as


3/12

The Drosten RT-PCR test is fabricated in a way that each country and laboratory perform it differently at too high Ct and that the high rate of false positives increases massively due to cross-reaction with other (corona) viruses in the "flu


4/12

Even asymptomatic, previously called healthy, people are tested (en masse) in this way, although there is no epidemiologically relevant asymptomatic transmission. This means that even healthy people are declared as COVID


5/12

Deaths within 28 days after a positive RT-PCR test from whatever cause are designated as deaths WITH COVID. This means that other causes of death are reclassified as